How to Raise a Poor Credit Score

Credit scores are indicative of your financial health at any given time. Credit scores change based on the amount of outstanding debt, your payment history, the types of credit listed on your report, the length of time you have been using credit and new credit inquiries. Poor credit scores can prevent you from obtaining a loan, increase your insurance rates or prevent you from getting a job. You can raise a poor credit score with attention to detail and by managing your credit accounts responsibly.

Instructions

1

Pay your bills on time. Payment history impacts your credit score by 35 percent. Payments within the past six months to one year impact credit scores more than older payments.

2

Pay any past-due bills to bring the account current. Collection accounts are the exception to this rule; collection accounts remain on your credit report for seven years, paid or not.

3

Maintain a low balance on credit cards. Outstanding debt can impact your credit score by 30 percent. Credit-to-debt ratio is part of the outstanding debt aspect of your credit score calculation. You can determine your credit-to-debt ratio by dividing the amount of debt you owe by the total available credit. For example, if you have $10,000 of available credit and owe $3,500 in debt against that credit, your credit-to-debt ratio is 35 percent.

4

Open a new credit card and make timely payments. Credit cards and other installment loans will raise a poor credit score if the accounts are managed responsibly.

5

Reactivate an old credit card with a purchase. Credit history is 15 percent of a credit score calculation. Old cards with no balance may not be reported to the credit bureaus as they are not active.

6

Dispute incorrect information on your credit report with all three credit bureaus. TransUnion, Equifax and Experian offer an online dispute alternative, or you can contact each agency in writing. Collections accounts can only be listed on your credit report for seven years, so pay attention to details. Disputing and removing negative information can improve a poor credit score.